Paradigm Opportunity Protects Investors in Tough Times

The mutual fund beats its benchmark, earning the top spot for performance and risk measures.

(Editor's note: TheStreet today named 82 mutual funds and exchange traded funds, or ETFs, winners and runners-up in its second annual awards ceremony. A list of the funds and related articles can be found on the awards page.)

BOSTON ( TheStreet) -- When children are asked what they want to be when they grow up, they're more likely to say "firefighter" or "doctor" before "asset manager." But even as a kid, Jason Ronovech, manager of the Paradigm Opportunity Fund ( PFOPX), enjoyed the thrill of researching and picking stocks.

Ronovech, who broke into the investing business 12 years ago, says he used to participate in newspaper stock-picking contests when he was younger. Those contests rewarded those with a model portfolio and fictitious amount of money to manage, skills that have benefitted Ronovech as he now hunts for the best small-cap stocks he can buy as a professional investor.

Jason Ronovech

"I enjoyed that. I enjoyed the excitement of it," Ronovech says by phone from his office in Albany, New York. "It was interesting to do the analysis and see the results as you compete against others. It's a combination of enjoying analysis and looking at a broad number of companies and learning about them."

In 2000, Ronovech landed at Paradigm Capital, a boutique investment-management firm focused on small-cap stocks. The company is nearly two decades old with $2 billion in assets under management, the vast majority of which are with institutional and wealthy clients. Paradigm Capital launched its own mutual fund family a decade ago with the Paradigm Value Fund ( PVFAX). Ronovech is the manager of that fund as well as the Paradigm Select Fund ( PFSLX), which was started in 2005.

However, it's Paradigm Opportunity that earns a "buy" rating and a five-star grade from TheStreet Ratings, which indicates the fund has an excellent track record for maximizing performance while minimizing risk. Because of that, Paradigm Opportunity won TheStreet'sBest Funds 2012 award for the small-cap core category. The runner-up was Intrepid Small-Cap Investor ( ICMAX), run by Mark Travis, Jayme Wiggins and Greg Estes.

The Paradigm Opportunity fund returned an annual average of 22.3% in the three years through Dec. 31, outpacing the benchmark Russell 2000 Index's return of 15.6%. The fund has an average annualized total return of 4.3% since inception on Jan. 1, 2005, compared to a 3.2% return for the Russell 2000. A hypothetical $10,000 investment made at the fund's inception would have grown to $13,442 as of Dec. 31.